FREE TRIAL - ps:AOCRKN.com = From: Philip Schiller < Subject: HTMLS Poses Threat to Flash and the App Store Received(Date): Thu, 28 Jul 2011 09:27:10 -0700 To: Eddy Cue Date: Thu, 28 Jul 2011 09:27:10 -0700 Food for thought: Do we think our 70130 spit wil last forever? Whi | am a staunch supporter of the 70/30 spit and keeping it simple and consistent across our stores, | don’ think that 70/30 wil lat that unchanged forever. | tink Someday we wil see enough challenge from another platform or web based solutions to want o adjust our model (already Google has foled out a web in app purchase model at 95/5). If someday down the road we wil be changing 70/30, then | think the question moves from “I” to “when” and "ow Im not suggesting we do anything differently today, only that whenever we make a change we. dot from a positon of strength rather than weakness. That we use any such change to our advantage il possible. An thinking about ths long n advance can only help to look at an eventual change as an ‘opportunity (with developers, press, customers, tc). Just as one thought, once we are making over S18 a year in profit from the App Store, is that enough to hen think about 2 model where we ratchet down from 70/30 fo 75/25 or even 80720 ff we can maintain a $18.2 year un rate? | know that is controversial, | just tee it up as another way to look atthe size of the business, what we want to achieve, and how we stay compete. ‘Again, just food for thought blogs wsi.comtech-enrope/201 1/07/28 bmlS-poses-threat-to-flash-and-the-app- store/?mod=google news blog, HTMLS Poses Threat to Flash and the App Store Throughout a large proportion of Tech Europe postings there is an underlying thread or, more accurately, a common language—HTMLS5. Just this week, it underpins Mozilla’s challenge to Android and the rest; the website-building service of BaseKit and, perhaps, Adobe's decision to close its app stores. Few outside the techie world were perhaps aware of HTMLS before April 2010 when Apple CEO Steve Jobs declared iPhones and iPads would never support Adobe Flash. PX-0417.1 CONFIDENTIAL APLEG_00138494